A brief explainer of the blue economy

A pier sticks out into the Makassar Strait off the coast of East Kalimantan, Indonesia, an area rich in petroleum, natural gas and other marine resources that feed’s the country’s blue economy. CIFOR Photo/Augusta

Indonesia - Carbon-rich coastal ecosystems are rocketing to the forefront of global actions on climate change, and uncomfortable terms like “plastic oceans” and “water wars” are casting a growing shadow over the future of the world’s collective water resources. Yet, ocean-based economic growth – the “blue economy” – shows no signs of slowing, leaving only the option of harnessing its expansion to reverse dangerous trends and protect the health and wealth of oceanic ecosystems.

The term emerged about 10 years ago, but there is still no commonly accepted terminology on blue economics. I say the blue economy is about profit-generating activities owned or conducted by locals. It is sustainable, and it is not confined to natural resources. For instance, the blue economy is not confined to fisheries and aquiculture but also includes tourism, mining, transportation.

The emphasis is not on huge or external investment. It should be local, so the benefits can directly go to the people. This doesn’t mean the economics are traditional. They can be export-oriented, well developed, technological – but should be sustainable and directed at local people. Every country has a different meaning, and some are not sustainable – marine-based but not blue. Again, it depends on the way you define the term. But I can say that most are normally dealing in these two very important aspects: sustainability and livehlihoods.

Why is the blue economy a hot topic right now?

I think number one is because of the trend of capitalization of natural resources. Huge investors are coming and have the chance and accessibility – or are provided by governments, especially external investors – to exploit resources and leave locals behind. People totally dependent on resources don’t have the same chance to utilize resources as foreign people do. That’s basically the problem.

That’s one reason why all over the world, especially in developing countries, governments and communities are feeling it’s now the time for everyone to think about accessibility to resources. That’s like I said – the blue economy should be owned by local people. If it’s not, then it’s not blue economics.

Number two, everybody is realizing now that there are many problems in resources themselves – problems of pollution, resource degradation, littering and multi-use of marine resources. Because of these, I can say that in terms of economic development, everyone realizes that if we don’t change how we utilize resources, then not so far from now, the resources will vanish and we’ll have nothing. We need to create another approach to using resources, such as going to the blue economy where sustainability guides the process of utilization or exploitation of resources.

Within the blue economy, what are some such resources and sectors with development potential?

Aquiculture should be developed. Number two is bioprospecting, or how you can derive chemicals, medicines or other important substances from biodiversity and the huge number of organisms we have. Number three is drinking water. A bottle of mineral water is very expensive, more than kerosene or gasoline right now in Indonesia. You go everywhere, even Papua, and drinking water is coming from East Java. Can you imagine that? It’s bad economics.

So far there is no global private multinational company entering this industry, and it is difficult to develop. Desalination technology is the first step. But if it’s not driven by private investment, we can’t rely on countries for something like this.

Why not? What policy frameworks are in place for helping this economy grow, and what’s still needed?

If you have national-level policy, it’s the foundation for all the activity that will be implemented at the local or regional level. But in my experience, this is also difficult.

Indonesia has very good national policy, with regulations and annual and five-year plans. But we don’t implement this policy because of our problems. There’s low capacity for local-level management to transform national policy into real programs in the field. From a financial perspective, there is no incentive provided by the government or banking systems for people to invest and develop and run businesses.

And infrastructure. We don’t have good infrastructure. You can catch a lot of fish in eastern Indonesia, but then you don’t have processing or storage facilities. Even if you develop a plant, you don’t have enough electricity and generators to power it.

It takes time for provinces to totally perform on national framework.

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Where are you seeing blue economics being implemented well in Indonesia?

In Raja Ampat, there are no large-scale fisheries. The province relies on tourism and small-scale fisheries and aquiculture. Fifteen years ago, the regent also made a very good decision, saying he was laying the foundation for the long-term economy by choosing tourism and banning mining. He knew that if you have mining, you’ll upset tourism very quickly, and so decided to ban it totally. It was very difficult for local people to make money at first, because tourism of course takes a long time to develop, but in time everyone then gets benefits. They can be directly involved in the economy. They have come up with the optimal number of tourists that can enter Raja Ampat in a year – about 20,000 – and won’t go beyond that.

But in many other places, governments are at a crossroads, choosing between economic activities that can generate a lot of income and protecting the livelihoods of their people. It depends on the perspective of leaders in deciding what type of economics they want to use. Short-term subsistence will bring direct impact in a short time but problems later.

Who’s leading the global conversation?

South Africa is one. The Netherlands and Germany also, by emphasizing aquiculture. Scandinavian countries are also very good in blue economics, with salmon, of course. Australia, especially in the south – Tasmania.

But those are not developing countries. Developing countries are lagging behind in implementing blue economic culture.

How does blue economics apply in the high seas?

For tuna fishing in the Indian Ocean, there is an organization, the Indian Ocean Tuna Commission (IOTC), which includes all countries bordering the Indian Ocean. To regulate how to utilize fishing resources there, they make a total quota for ocean, then divide it up among member countries.

But, for example, Indonesia redistributed its quota to large-scale investors from South Korea, Taiwan and others not from Indonesia. This is not blue economics. It’s foreign investment.

How does the blue economy relate to the green economy?

I think the most important difference between blue and green is in the involvement and participation of people. Green emphasizes the sustainability of groups, so organizing farmers or plantation workers into big groups. It’s more about producing a lot of commodities and non-processed products. Blue economics is not necessarily about producing a lot of commodities, but emphasizing technology that can result in high-value products. The difference is that: high volume (green) versus high value (blue).

If you develop your blue economy by involving local people and they have capacity to adapt to a changing environment, then you touch climate adaptation. I’m not talking in numbers, but from scientific and logical points of view, once you develop the blue economy, you maintain mitigation and improve adaptation.

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